Illawarra agent convicted of Trust Account fraud

21 Sep 2015

A director of a Warilla real estate agency believed to have defrauded her clients of $789,000 has been sentenced in Parramatta District Court.

Megan Ann Harrod, a director and company secretary of J &M Harrod Pty Ltd trading as Harrods Real Estate, was sentenced to imprisonment for a period of two years to be served by way of an Intensive Corrections Order commencing on Friday 25 September 2015.

In December 2013 Harrod pleaded guilty to two charges of fraudulently converting money as a licensee, relating to money taken from the company’s rent trust account and sales trust account.

An examination of the licensee’s accounts by Fair Trading found numerous deficiencies in Harrods Real Estate’s rent and sales trust accounts and uncovered falsified corporate book keeping records created to disguise and hide the fraud.

Investigators also established the defendant had engaged in a type of ‘kite flying’ – manipulating the monthly rental trust account reconciliation by drawing cheques for the payment of fictitious disbursements at the end of each calendar month in order to give the false appearance the account was balanced – to cover up for her unauthorised withdrawals.

The court heard the defendant appeared to suffer from a gambling problem, based on poker machine activity statements obtained from the Western Suburbs Leagues Club Illawarra and Shellharbour Workers Club

In sentencing the court took into account the fact the Harrod family had repaid money to the NSW Property Services Compensation Fund.

Fair Trading Commissioner Rod Stowe said the consumer protection agency would continue to crack down on real estate agents who commit serious fraud such as trust account misappropriation.

“Landlords, tenants and home owners are entitled to feel confident the significant sums of money they rely real estate agents to hold in trust for them are kept securely in designated trust accounts and the money used for the intended purposes,” Mr Stowe said.

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